NYSE:MA

Stock Analysis Report

Executive Summary

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally.


Snowflake Analysis

Solid track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Mastercard's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MA's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

17.1%

MA

13.0%

US IT

9.9%

US Market


1 Year Return

5.2%

MA

-4.2%

US IT

-11.9%

US Market

Return vs Industry: MA exceeded the US IT industry which returned -3.5% over the past year.

Return vs Market: MA exceeded the US Market which returned -11.5% over the past year.


Shareholder returns

MAIndustryMarket
7 Day17.1%13.0%9.9%
30 Day-14.7%-14.8%-15.0%
90 Day-16.8%-17.2%-21.5%
1 Year5.7%5.2%-3.2%-4.2%-10.0%-11.9%
3 Year124.1%120.2%57.8%51.0%12.3%5.1%
5 Year194.1%184.6%87.3%70.8%32.5%18.1%

Price Volatility Vs. Market

How volatile is Mastercard's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Mastercard undervalued compared to its fair value and its price relative to the market?

12.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MA ($247.65) is trading below our estimate of fair value ($282.86)

Significantly Below Fair Value: MA is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: MA is poor value based on its PE Ratio (31x) compared to the IT industry average (24.8x).

PE vs Market: MA is poor value based on its PE Ratio (31x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: MA is poor value based on its PEG Ratio (2.8x)


Price to Book Ratio

PB vs Industry: MA is overvalued based on its PB Ratio (42.3x) compared to the US IT industry average (2.7x).


Next Steps

Future Growth

How is Mastercard forecast to perform in the next 1 to 3 years based on estimates from 32 analysts?

11.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MA's forecast earnings growth (11.2% per year) is above the savings rate (1.7%).

Earnings vs Market: MA's earnings (11.2% per year) are forecast to grow slower than the US market (12.3% per year).

High Growth Earnings: MA's earnings are forecast to grow, but not significantly.

Revenue vs Market: MA's revenue (9.8% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: MA's revenue (9.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MA's Return on Equity is forecast to be very high in 3 years time (123.3%).


Next Steps

Past Performance

How has Mastercard performed over the past 5 years?

15.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MA has high quality earnings.

Growing Profit Margin: MA's current net profit margins (48.1%) are higher than last year (39.2%).


Past Earnings Growth Analysis

Earnings Trend: MA's earnings have grown by 15.2% per year over the past 5 years.

Accelerating Growth: MA's earnings growth over the past year (38.6%) exceeds its 5-year average (15.2% per year).

Earnings vs Industry: MA earnings growth over the past year (38.6%) exceeded the IT industry 14.3%.


Return on Equity

High ROE: Whilst MA's Return on Equity (135.5%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Mastercard's financial position?


Financial Position Analysis

Short Term Liabilities: MA's short term assets ($16.9B) exceed its short term liabilities ($11.9B).

Long Term Liabilities: MA's short term assets ($16.9B) exceed its long term liabilities ($11.3B).


Debt to Equity History and Analysis

Debt Level: MA's debt to equity ratio (142.3%) is considered high.

Reducing Debt: MA's debt to equity ratio has increased from 22.5% to 142.3% over the past 5 years.

Debt Coverage: MA's debt is well covered by operating cash flow (96%).

Interest Coverage: MA's interest payments on its debt are well covered by EBIT (76.1x coverage).


Balance Sheet

Inventory Level: MA has a low level of unsold assets or inventory.

Debt Coverage by Assets: MA's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

What is Mastercard's current dividend yield, its reliability and sustainability?

0.65%

Current Dividend Yield


Upcoming Dividend Payment

TodayMar 29 2020Ex Dividend DateApr 08 2020Dividend Pay DateMay 08 202030 days from Ex DividendBuy in the next 10 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: MA's dividend (0.65%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: MA's dividend (0.65%) is low compared to the top 25% of dividend payers in the US market (5.45%).


Stability and Growth of Payments

Stable Dividend: MA is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: MA is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: MA is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MA's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.6yrs

Average management tenure


CEO

Ajay Banga (59yo)

9.67s

Tenure

US$20,379,353

Compensation

Mr. Ajaypal S. Banga, also known as Ajay, has been the Chief Executive Officer of Mastercard Incorporated since July 1, 2010. He served as President of Mastercard Incorporated since August 31, 2009 until M ...


CEO Compensation Analysis

Compensation vs Market: Ajay's total compensation ($USD20.38M) is above average for companies of similar size in the US market ($USD11.74M).

Compensation vs Earnings: Ajay's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ajaypal Banga
CEO & Director9.67yrsUS$20.38m0.038% $95.8m
Timothy Murphy
Chief Franchise Officer & General Counsel5.92yrsUS$4.47m0.0039% $9.8m
Ann Cairns
Executive Vice Chairmanno dataUS$4.50m0.0086% $21.3m
Gilberto Caldart
President of International Markets6.58yrsUS$4.23m0.0058% $14.4m
Craig Vosburg
President of North America5.92yrsUS$4.72m0.0033% $8.2m
Michael Miebach
Presidentno datano data0.0021% $5.2m
Sachin Mehra
Chief Financial Officer0.92yrno data0.00068% $1.7m
Edward McLaughlin
President of Operations & Technology2.83yrsno data0.0024% $5.8m
Sandra Arkell
Corporate Controller & Principal Accounting Officer2.92yrsno data0.000090% $224.0k
Warren Kneeshaw
Executive Vice President of Investor Relations3.33yrsno datano data

4.6yrs

Average Tenure

52yo

Average Age

Experienced Management: MA's management team is considered experienced (4.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ajaypal Banga
CEO & Director9.67yrsUS$20.38m0.038% $95.8m
Julius Genachowski
Independent Director5.75yrsUS$314.79k0.00020% $497.8k
Jackson Tai
Independent Director11.5yrsUS$335.09k0.0025% $6.3m
Richard Haythornthwaite
Independent Chairman of the Board13.5yrsUS$490.30k0.0032% $8.0m
José Octavio Reyes Lagunes
Independent Director12.17yrsUS$317.59k0.0030% $7.4m
Oki Matsumoto
Independent Director3.75yrsUS$305.09kno data
Merit Janow
Independent Director5.75yrsUS$328.59k0.00020% $497.8k
Steven Freiberg
Independent Director13.5yrsUS$347.59k0.0027% $6.8m
David Carlucci
Independent Director13.83yrsUS$335.09k0.0042% $10.4m
Rima Qureshi
Independent Director8.92yrsUS$310.09k0.0010% $2.5m

10.7yrs

Average Tenure

61yo

Average Age

Experienced Board: MA's board of directors are seasoned and experienced ( 10.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Mastercard Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mastercard Incorporated
  • Ticker: MA
  • Exchange: NYSE
  • Founded: 1966
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: US$248.915b
  • Shares outstanding: 1.01b
  • Website: https://www.mastercard.com

Number of Employees


Location

  • Mastercard Incorporated
  • 2000 Purchase Street
  • Purchase
  • New York
  • 10577
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
M4IDB (Deutsche Boerse AG)YesClass A Common StockDEEURMay 2006
MANYSE (New York Stock Exchange)YesClass A Common StockUSUSDMay 2006
M4IXTRA (XETRA Trading Platform)YesClass A Common StockDEEURMay 2006
MA *BMV (Bolsa Mexicana de Valores)YesClass A Common StockMXMXNMay 2006
MASWX (SIX Swiss Exchange)YesClass A Common StockCHCHFMay 2006
0R2ZLSE (London Stock Exchange)YesClass A Common StockGBUSDMay 2006
MASTWBAG (Wiener Boerse AG)YesClass A Common StockATEURMay 2006
M4IETLX (Eurotlx)YesClass A Common StockITEURMay 2006
MSCD34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM CL 'A' USD0.0001BRBRLFeb 2012

Biography

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers related products and services. The company offers integrated products and services for account holders, merchants, financial institutions, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid payment programs and management services; and commercial payment products and solutions. It also provides value-added products and services comprising safety and security products, loyalty and reward programs, information and analytics services, consulting services, and issuer and acquirer processing services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus brands. Mastercard Incorporated has strategic partnerships with Network International to develop electronic payments in Africa and the Middle East; and R3 to develop and pilot a new blockchain-enabled cross-border payments solution, as well as a strategic alliance with Finexio. The company was founded in 1966 and is headquartered in Purchase, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 01:28
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.